The following quotes signal the beginning of the End Game for the US Dollar:
“We hope the U.S. government will take responsible policies and measures to safeguard investors’ interests,” [China’s ministry] said in a statement.
“Foreign-exchange reserves have exceeded the reasonable levels that we actually need,” [China’s central bank governor] said. “The rapid increase in reserves may have led to excessive liquidity and has exerted significant sterilization pressure. If the government doesn’t strike the right balance with its policies, the build-up could cause big risks,” he said, without elaborating.
These two statements, in plain terms, are China saying it’s sick of the US Dollar. Remember, the US Dollar and Dollar-denominated assets (Treasuries etc) are China’s single largest holding. So the reference to “foreign-exchange reserves,” is synonymous with “US Dollar denominated assets.”
On the surface, it will be easy to chalk all of this up to politician speak. After all, China has been issuing warnings to the US regarding the latter’s financial condition since 2009.
However, a few key developments have occurred that make it clear this latest round of statements are the real deal.
First and foremost, China and Russia agreed late last year to begin trading with one another in their own currencies, NOT the US Dollar. In that step alone, two of the largest emerging markets (and economies) in the world moved away from the US Dollar. Add to this the fact that China just agreed to expedite trade relations with Brazil and you’ve got the beginnings of a flight from the US Dollar and the end of the Dollar’s reserve currency status.
Indeed, not three months after China signed this deal with Russia, China’s president visited Washington and delivered a speech in which he stated that, “the current international currency system is the product of the past” (edits mine).
Consider the “past” comment in relation to China’s decision shutting the US Dollar out of its trade with Russia (and other items I’m about to detail). In this sense, the “past” is the US Dollar as the world’s reserve currency.
Indeed, China has been actively moving to distance its reliance on the US as a trade partner.
As you can see, in just four years, the US has gone from accounting for nearly a third of China’s exports to less than a quarter. That is a MASSIVE shift in less than a decade (at this pace the US will be down to just 15% of China’s exports by 2015).
China is literally putting its money where its mouth is. And its mouth is now openly telling the world that it’s no longer interested in US Dollars or Dollar denominated assets.
In plain terms a US Dollar collapse is on the way. What follows will be a hyperinflationary disaster that will shred savings and paper assets to nothing.
That’s why I’m already preparing subscribers of my Private Wealth Advisory newsletter with my How to Survive Hyperinflation Special Report.
I’ve already published Part 1 of this report which explains in painstaking detail just HOW and WHY the US is to a hyperinflationary collapse. And over the next three weeks, I’ll be releasing Parts 2-6 each of which will detail one EXTRAORDINARY inflation hedge that will outperform even Gold and Silver when hyperinflation takes hold
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